What Makes Cryptocurrency Popular?

Trading cryptocurrency has become increasingly popular, particularly among young adults. Even as countries like Russia and China crackdown on the crypto market, the industry continues to expand and develop. There are a lot of factors that have contributed to cryptocurrencies’ popularity, including attitudes and actions of governments, media hype around the skyrocketing Bitcoin price, possibility for profit, and word of mouth.

Regional Circumstances

In places like Japan and South Korea, entrepreneurs have taken extreme interest in cryptocurrency, and their respective governments have jumped at the chance to use this to reinvigorate their economies. In South Korea, for instance, digital tokens are often sold higher than in any other market of the world, simply because the demand is higher. More than 30% of adults in South Korea participate in cryptocurrency in some shape or form. One reason that cryptocurrency has become so popular in the region is that the unemployment rate for youths is relatively high and cryptocurrency trading represents an opportunity for extra income. Moreover, young professionals see crypto as a shortcut to wealth and a way to circumvent the highly competitive job market in the country.

When it comes to Japan, it is unique in that Bitcoin is completely legal and clearly regulated. There are also a lot of places to spend cryptocurrency in Japan. This makes digital currency more useful in the region than it is in most other countries. Bitcoin can be used in lieu of cash more easily here. Over 4,000 stores in Japan accept payments in Bitcoin. Cryptocurrency can also be used at bars and food joints. It also helps that nearby countries like China have banned cryptocurrency. Together, these factors have made cryptocurrency incredibly popular in specific areas.

Technology

A lot of people get into cryptocurrency to gain access to blockchain technology. Cryptography has drawn the attention of developers and technology enthusiasts who recognize the potential of decentralized applications and smart contracts. A lot of these applications offer high levels of security and transparency, so they appeal to wide groups of people. Blockchain technology also offers people cheaper and more efficient business solutions. This has made investing in Ethereum in particular popular. The open-source nature of blockchain has aided the cryptocurrency popularity immensely.

Hype

Bitcoin was all over the media in 2017, which helped spread awareness. Cryptocurrency was touted as the next big thing. It seemed that every week new stories came about millennials becoming millionaires overnight. When people read these stories, they feared missing out and bought into the hype.

One of the most important things driving the popularity of cryptocurrency is awareness. A few years ago, most people had never even heard of Bitcoin. As more people learned what it is, they sought out more information about it. This led many people to start trading Bitcoin and then altcoins. Even having several people see huge returns on investments can have a major impact. People are always looking to make quick money, and many are willing to take big risks to see it happen.

Young people have driven much of the growth in the cryptocurrency industry. For instance, in the United States, around 18 percent of students either possess digital currency or have possessed digital currency in the past. There has also been a spike in the number of university courses that instruct on blockchain and cryptocurrency.

Psychology

Psychology has also played a major role in propelling the popularity of cryptocurrency. There is a large sector of society who hates feeling like they do not have control or independence. The decentralized nature of digital currency has been a huge draw. A lot of people do not want big banks to have control over their assets. Some even hate the idea that their currency is backed by a government. With blockchain technology, people can have full control over their money.

Fear is also powerful. People fear that their money can be stolen or lost, seized by the government, or worry about a lack of privacy. Cryptocurrency has all these bases covered – it is permissionless, non-confiscatable, and free from third-party interference. These features appeal to the groups of people who have a distrust of governments and big financial institutions.

Increasingly, cryptocurrencies are becoming more capable of performing the tasks that fiat currencies do. At first, they did not have enough utility, mostly because not enough vendors, services, and merchants accepted cryptocurrencies as a payment. This is gradually changing for the better. Now people are jumping at the chance to have a currency option that can give them more freedom, more privacy, and more anonymity.

Financial Markets and Startups

While cryptocurrency has grown in popularity, so has the popularity of initial coin offerings. A lot of new blockchain projects and startup companies are finding innovative fintech solutions, and investors see a chance to contribute to these projects in hopes of reaping some of the profits. This helped Bitcoin and Ethereum skyrocket in value last year.

It is hard to explain how cryptocurrency has experienced the enormous growth in such a short amount of time. There are many different factors that have contributed to cryptocurrencies’ success. However, high publicity, regional and political circumstances, word of mouth, technological innovation, utility for startups are only a few of the things that have helped cryptocurrency become as popular as it is. Although cryptocurrencies are having a setback right now, they are expected to continue blossoming.